| This study was conducted to investigate the effect of within-field variability on the economic and environmental benefits from precision farming. The objectives of the study were to (i) illustrate analytically the influence of within-field variability on the economic outcomes of a given sampling intensity and therefore, the choice of the most economical sampling scheme, (ii) develop a method to determine the minimum spatial variability (distribution of land within a field with different production capabilities) needed so the additional returns from precision farming would at least cover the costs of using the technology, (iii) illustrate the role of weather expectations in precision farming, (iv) examine the environmental benefits from precision farming, and (v) examine policy options to promote precision farming if it is found to reduce environmental degradation.;The analysis assumed that the farmer was a profit maximizer and that the technology was adopted with the custom services hired from the farm service sector.;The results suggested, for each sampling intensity considered, that the more variability, the higher the returns above variable input costs from precision farming. Further, the results indicated in general that higher sampling intensity was economically optimal for the fields with higher variability.;Precision farming need not necessarily imply grid sampling. The technology could be used to apply inputs at variable rates on different land types with distinct yield responses to applied inputs. Under such circumstances, economic benefits from precision technology depend upon the existing land mix on the field. The study developed a method to identify the land proportions referred to as spatial break-even variability proportions, which could ensure that the additional returns from precision farming could at least cover custom charges.;The results indicated potential of the new technology to reduce nitrogen (N) loss into the environment. The analysis also suggested increasing importance of well-informed and accurate weather expectations under precision farming. Given the evidence of environmental benefits from precision input application, the study suggested two policy options to promote the technology. They were subsidizing custom charges and restricting N use. |
